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SEC Awards More Than $5 Million To Whistleblower

On January 13th, 2023, the Securities and Exchange Commission (SEC) announced that more than $5 million had been awarded to a whistleblower. The whistleblower came forward and voluntarily provided useful information that aided the SEC in taking enforcement action to stop securities fraud. Notably, a second claimant was denied compensation in the same case. Within this post, our Miami SEC whistleblower lawyers discuss the award issued by federal regulators.

SEC Award: More than $5 Million to Claimant 1, Compensation Denied for Claimant #2 

In this case, two whistleblowers made a claim for compensation from the SEC. Claimant #1 was awarded more than $5 million in compensation. The agency determined that this individual voluntarily came forward and provided original information that helped regulators take enforcement action. However, Claimant #2 was denied whistleblower compensation. While both individuals made timely disclosures to the federal agency, the SEC determined that Claimant #2’s tip was “vague and conclusory.” Whistleblower compensation was denied because it did not spur any enforcement action. Whistleblower compensation is only granted to people who bring the SEC original information that contributes to enforcement action against securities fraud/investment fraud.

 Considering a Disclosure? Four Key Things to Know About the SEC Whistleblower Program 

Are you considering making a disclosure of sensitive information about suspected securities fraud to the SEC? The SEC Whistleblower Program offers monetary awards to qualifying whistleblowers. Here are four key things to know about the program:

  1. Eligibility: To be eligible for an award, a whistleblower must provide the SEC with original information that leads to a successful enforcement action resulting in monetary sanctions of over $1 million. The information must also be voluntarily provided and not already known to the SEC or obtained from public sources. While many whistleblowers are securities industry insiders, that is not required. Anyone can provide information.
  2. The Amount: When successful,  SEC whistleblowers may be eligible for an award of between 10% and 30% of the monetary sanctions recovered in an enforcement action. The exact award amount will depend on various factors, such as the significance of the information provided and the assistance provided by the whistleblower. The SEC has discretion.
  3. Anonymity Protections: Whistleblowers can submit information anonymously, as long as they are represented by an attorney. The SEC maintains the confidentiality of whistleblowers and does not disclose their identities without their consent. Indeed, a whistleblower’s name will never be published to the public.
  4. Retaliation Protections: The SEC Whistleblower Program also provides protection for whistleblowers from retaliation by their employers. Protections include an employer prohibition from discharge, demotion, suspension, threats, harassment, or other discrimination. 

Consult With Our Miami, FL Securities Industry Whistleblower Attorney Today

At ​Carlson & Associates, P.A., we are committed to helping ensure fair markets for investors. If you are considering making a confidential disclosure of securities fraud, our attorneys are here as your legal resource. Contact us today to set up a confidential consultation with an SEC whistleblower rights lawyer. From our Miami office, we provide legal services throughout the wider region.


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